Over the past couple of years, I’ve been lucky enough to be selected to serve on several “advisory boards” for startups in the talent acquisition space. I am as surprised by this fact as you are.
I mean, I can write purple prose (to mixed reactions) but that hardly qualifies me to advise startups on stuff like “go-to-market.”
This is a fair point, since I don’t know what “go-to-market” means, just that most CEOs and VC guys say it a lot. They all have MBAs and like top shelf vodka, so I trust it’s important, nod my head and let them buy bottle service.
After sitting on close to a dozen advisory boards to date, I have learned a shit ton of stuff about software and startups, but I still cannot answer the one question I’m almost always asked: “what the hell does an advisory board do, anyway?”
It’s a fair question. I’m still asking it myself.
In some cases, granted there seems to be no point other than PR or because that’s what cool startups do these days.
Advisory boards are the new standing desk, bro.
Caught In A Hustle.
I suspect there was a cover story, most often in Fast Company, sometimes Inc. or Fortune (print, not .com) with some silly title like, “Why Every Startup Needs An Advisory Board.” I imagine a spread of several pages of multi-ethnic teams in conference rooms with themed names like, “Copernicus” or “Galileo” in blasé tech companies like, say, Yahoo! or Yelp! (their punctuation, not mine). Why are the lamest tech companies always so prominently featured in customer success stories? Like, c’mon. Cisco? That’s the best you’ve got?
I see stupid pull quotes like “Having an advisory board helped us have the confidence to know we had what it took to be the next big thing.” – Some VP of Marketing
I see this PR generated sound bite sitting over a one shot of a smiling Asian or Latina woman in her early 30s, as this is the demographic companies like to feature in collateral, and I see a freelance journalist making up some trend after waiting until the last second before deadline to write a cover story. He’s smug now that people think that their anecdotal evidence was accepted as evidence of an actual best practice. Nice, dude.
This fake business journalism is also what gave rise to those crazy “Millennials” we can’t stop talking about, but aren’t actually a thing, either. Those who don’t know, know to make shit up. I give you “talent communities,” for instance.
Either way, what I don’t get what an advisory board is supposed to do, either. Every company seems to use them differently; the compensation is exclusively in the form of equity that has less cash value than most coupons they hand out at baseball stadiums. Sometimes, there are some side perks, like paid trips or honorariums for the time involved, but mostly, the whole advisory thing is a labor of love.
What it is I’m loving, I don’t really know. Probably the feeling that in an industry where nothing has changed in my decade of caring way too much about the esoteric aspects of talent acquisition, there are a handful of kick ass companies out there doing really cool, really innovative things. By some awesome twist of fate, I get to be involved in that, and since I’m a huge tech geek anyways, it’s kind of like getting to nerd out and look legit somehow in the process. But the “advisory” concept I think lies as much in the advisor’s intrinsic motivation as the actual structure or schema for third party feedback and shared expertise.
I am as new to all of this as everyone else. I was asked informally by the CEO and/or founder, in most cases, if I’d be interested, they’d drop some names, and I’d say, “yes, sounds great.”
Then there was a press release with my name, getting tagged in a bunch of B2B posts and some back slapping about how awesome we all were. That has been the consistent way advisory work seems to begin. Since none of my portfolio of plays have had a liquidity or exit event, I have no idea how it ends. Ideally with me on an island with a rum drink. The interim, however, has absolutely no consistency.
It’s a hustle, but one that’s done with the interests of the end user in mind, because unless their needs are met, the equity shit is worthless.
Dance With The Devil.
The major benefit I’ve found so far to advisory work isn’t monetary or even prestige, as I’d originally thought when offered several hundred thousand shares of SaaS company for my long term advice on retainer. Both would be great, but what makes the ambiguous, often completely improvised role of an advisor so meaningful is watching companies you care about scale, succeed and build a great product that help fix real problems really plaguing the industry you care about.
I suspect none of my advisory clients’ success to date has anything to do with my involvement, but that still doesn’t keep me from feeling an overwhelming sense of pride every time I see them in the news or get an e-mail announcing some big win. It’s like watching your team win the World Series. Trust me on this one. #ForeverRoyal
I can’t speak for the advisory boards I’m not on, the ones I’ve quietly quit because they turned out to be pyramid schemes or vaporware or the ones who booted me for some blog post. I must also mention the two advisory clients I’ve worked with that fizzled out, but I think these were outliers. Plus, I never heard from them except occasionally from their third tier publicist desperately trying to make a placement before her quarterly review.
It was sad to see them shut up shop, but in one of the two cases, I did get a great “I told you so” in with an obstinate CEO who was too busy being Steve Jobs and guest posting on Mashable to run the company, but it gave me no joy. I still have the stock paperwork though, just in case.
On the whole, though, for whatever reason, I’ve seen enough to know that while I might never know what it is they’re supposed to accomplish – or at least the business case behind whatever makes a company give some douchebag like me equity in exchange for opinions. But I do know that they work. Even though they are every bit as vacuous as described above, their impact isn’t seen in social, in stock valuation or even directly in product.
It works because it helps companies actually listen to the market without listening to the market. Essentially, the whole white glove “advisory” events are unnecessary (but awesome) embellishments on the simple fact that startups benefit from a room full of people talking about the problems they’re trying to solve. We sit through the business updates because it’s interesting, but we’re all there to see the product and give feedback. And, of course, ultimately to promote the hell out of it, although that part’s not written anywhere. Just kinda understood.
Creation & Destruction.
This brings me to the fact that there have been many people trying to get into the advisory business of late, and many of them ask me how I did it. The honest answer is, “I don’t know.” I’m often asked to help get them spots. The answer to that is honestly, “you just kind of get asked.” The way never to get advisory work, from my observation, is to sell it actively as some sort of standard service offering. Those “gurus” almost always fail. I don’t try, and it works wonders.
What I do, though, is write about products I like. I tend to prefer products that are early stage startups, since those are tech companies focused on changing the fundamentals of the game instead of just figuring out new ways to make money off of end users. Their idea of innovation is more than “we put out an app” or “hey, look! How pretty is this dashboard?”
These tier one providers hey don’t need anyone’s help raking in cash and protecting the status quo. And when you can afford, say, Creed to play your user conference (or that you’d want to) mean that we probably aren’t going to be a great fit over the long term.
This is also the case for the probably two dozen advisory deals I’ve actually turned down – I’m sorry, but I can’t promote a pyramid scheme (see: staffing marketplace), an app that looks like the mobile equivalent of ET: The Video Game (but way harder and more frustrating for the end user or a video cover letter play.
You might not like my style, but know at least I believe in the crazy shit I say, unlike, say, your average “employer brand guru” or “candidate experience consultant.”
Yes, those are real. Yet, it’s the advisory thing people seem to question when it comes to legitimacy. Seriously?
Here’s the thing: advisory is a drop in an ocean of bullshit spend, and like elections, it’s decided largely on access to money and resources – and Tier 1 vendors have the equivalent of a Super PAC in their corner in terms of being able to spend more than companies bootstrapping to build interesting product.
I do like to feature the little guys doing big things, even if that costs me the business of some of the big guys. That’s OK. I’m bad with brand guidelines for companies that have someone whose entire job is enforcing them. This is why I am now in “online publishing.” It is one step above unemployment, but one step below, let’s say, temp staffing on the professional totem pole of respectability. Hey, could be worse. I could work for Zenefits (although I’d get way more action at the office) or have everything wrapped up in DHX stock options, I suppose.
The one thing I do have, oddly, is my credibility, which means when I write these posts, they’re quid pro quo. When I write about a company I’m an advisor for, I don’t always write a disclaimer, which I agree is suspect to many. But it’s always because of the posts that the advisory relationship begins, and I write those not with the objective of winning business, but with the objective of sharing cool new products I like with the recruiting audience I write for.
If they ask me to help them, and I like the product and people, I’m not going to turn down the chance to be part of the ride and help out on the advisory front. I like it, because I actually learn a whole lot of stuff about startups and the crazy world of VCs, PEs and similar intrigues of high finance. I think my clients like me, because I’m not afraid to call bullshit, and also to tell them what I think, not what will win me more business or make me look good.
I don’t know why, but startup CEOs seem to like that. Even if I tell them when they’re screwing up, and when I swear at them for doing stupid things like going to conferences about social recruiting or employer branding instead of reinvesting it in roadmap.
Immortal Technique: The Point of No Return.
The one thing I don’t do is give feedback that’s done with an RFP or specific case use in mind, which is the trap that so many products fall into. They get into the late stages with some big customer, put all their resources into checking the box on some bullshit requirement, and boom.
They lose the business and two quarters of development time just to do something like the ability to add a company’s logo to the backend of a UI/UX to brand what no one outside the company can actually see. This happens with startling frequency, by the way.
European banks are the worst at this, followed by high growth tech companies who want to cut deals because they’ve got buzz but no cash flow and health care employers with arcane reporting and compliance requirements that always end with them keeping whatever Siebel system they’ve run since Ronnie Reagan was running the country.
Every company that I advise I believe in, and I believe that because I see a shit ton of products. In fact, it’s largely how I spend my days. Most pitches, in fact, are truly awful. It’s normally some cut rate PR agency setting up a call with some bumbling VP of Product talking about how recruiting is broken, and how they’re going to fix it all – this is right before they show you a product that makes Taleo look as technologically advanced as Tupac’s hologram.
The ones with the worst ideas always have the most money – and there are actually quite a few companies raising over $10 million in this space you’ve never heard of on an almost daily basis (don’t believe me, look at Crunchbase) are often not even built for buyers like you in mind.
They are built to try to siphon away enough market share – that’s your budget – to erode competitive valuations. Video interviewing is a good example. VCs aren’t dumb – but they know they can neutralize the competition by offering a “me too” product that’s going to lose them money, but lose the other guy more.
This is what capitalists consider fun. They should have stuck to cocaine, which is cheaper and in fact a far better time than playing Risk with the World of Work. Of course, they don’t care about cheap – they expect the majority of their investments to fail. It’s assumed. This means that they’ve accepted there’s a good chance the vendor you’re going all in with won’t be around by the end of the fiscal year. They throw cash at possibility, not product. The minute that dream dies, you’re the one stuck with the nightmare.
I’m just trying to keep the dream alive, baby.
Matt Charney does not mention his clients in this post as legal disclosures at the end of posts are f-ing obnoxious, but if you want some product recommendations, hit him up any time.